Business

Local legislative delegation hears community wish lists for 2017 session

Rep. Tom Sloan, left, R-Lawrence, and other members of the Lawrence-area legislative delegation talk about issues coming up during the 2017 session during the Lawrence Chamber of Commerce's annual Legislative Priorities Breakfast.

Restoring financial stability to the state, increasing funding for K-12 and higher education and giving local governments more autonomy in making local decisions are among the top priorities going into the 2017 legislative session, area business, government and education leaders said Friday.

Local leaders discussed those concerns, and many more, during the annual Legislative Priorities Breakfast sponsored by the Lawrence chamber of commerce.

"The last several legislative sessions have taken a toll on morale in our district, on our reserve funds, on filling certain positions after retirement, and on (how) we pursued some of our initiatives," Lawrence school board president Marcel Harmon said.

"And with our reserves depleted to the point where it’s no longer fiscally responsible to really go any further, I fear we will be facing some tough decisions in the next fiscal cycle, at least until public education in our state is adequately and equitably funded," he said.

University of Kansas Executive Vice Chancellor Tim Caboni said KU has only two priorities this year: restoring the $10 million in cuts that Gov. Sam Brownback ordered last year for the Lawrence campus and KU Medical Center; and restoring stability to the state's budget and revenues.

"For us to do the work that we do for the state of Kansas and for Lawrence, we need to be able to plan," Caboni told the local House and Senate members. "And this is not just the University of Kansas. It’s all of higher education, and, to be candid, every state agency."

Lawmakers will gather in Topeka on Monday for the start of the 2017 session, with 50 of the 165 seats being filled by new members. The dominant issues they are expected to face are a looming $938 million budget gap over the next 18 months and the need to adopt an entirely new school funding formula.

For the last six years, the Kansas Legislature has been dominated by conservative Republicans loyal to Gov. Sam Brownback, and together they passed sweeping tax cuts that many now say are responsible for continuing budget shortfalls and under-funding of core state services, including education.

They also pushed through legislation that took away the authority of local governments to make certain decisions, especially in areas such as gun laws and local taxes.

But the 2016 elections produced a big shift in the Legislature as Democrats and moderate Republicans gained seats, and many of Brownback's supporters either retired from the Legislature or lost their bids for re-election, leading some local officials to hope that some of those policies can be reversed.

"Our big ask this year is for the state of Kansas to be a partner with local governments and to no longer be an adversary, which is frankly how we’ve felt over the last four to six years," said Douglas County Commissioner Mike Gaughan. "We are often at odds with the priorities of the Legislature. I hope that with the 50-plus new members you guys have this year, that’s no longer the case."

When it came time for them to speak, several local legislators talked about reversing many of the tax cuts that Brownback championed in 2012, including the so-called LLC exemption that eliminated taxes on income derived from limited liability companies, partnerships and other kinds of pass-through business structures.

Rep. Tom Sloan, R-Lawrence, said he believes a majority of Republicans in the House would support repealing the LLC exemption, and they might also be willing to restore a third income bracket for upper-income Kansans.

"The question will be whether the governor will veto anything that we propose, and I suspect that an override would be a very close vote," he said.

Sen. Marci Francisco, D-Lawrence, who will serve on the Senate tax committee this year, also predicted that reversing some of Brownback's tax policies will be high on the Legislature's agenda.

"We need to repair our tax code and return fairness," she said. "A lot of the discussion has been on expanding the tax base to re-include nonwage business income and reinstate allowances for depreciation. But we also need to look at income tiers."

Repealing the LLC exemption would generate about $250 million a year in revenue, according to legislative research staff. The much more costly portion of the 2012 tax cuts was the overall reduction in tax rates, including elimination of the third tax bracket, which has cost the state more than $700 million a year.

The Lawrence chamber's priority list called for a "fair and balanced" tax system, with relatively equal reliance on income, sales and property taxes. And while the chamber did not not specifically mention repealing the LLC exemption or any other income tax issue, it does oppose raising the state property tax, which is used mainly to fund education, or expanding the sales tax to include taxes on services.